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Discontinuing the Local Program Improvement Fund (LPIF)

Following a public hearing, the CRTC has decided that the LPIF has fulfilled its purpose and will be phased out by August 31, 2014, in accordance with Broadcasting Regulatory Policy CRTC 2012-385. Some consumers of cable and satellite television services will see an adjustment in their bills.

Why is the LPIF being phased out?

Given the recovery in the advertising sector and the successful transition to digital television, the CRTC is satisfied that the LPIF has fulfilled its purpose. Following a public hearing held April 16-20, 2012 to review the Fund, the CRTC decided to phase it out over two years.

How is the LPIF being phased out?

Cable and satellite companies contributions will decrease according to the following schedule:

September 1, 2012. Contributions will decrease from 1.5% of gross broadcasting revenue to 1%.

September 1, 2013. Contributions will decrease from 1% of gross broadcasting revenue to 0.5%.

September 1, 2014. The fund will be discontinued.

Background

What is the LPIF?

In 2008, during the recession, conventional television stations1 operating in non-metropolitan markets went through a difficult financial period. The CRTC created the LPIF to support local programming by these stations. In 2010, 78 stations received funding totaling $100 million. In 2011, 80 stations received $106 million in funding.

What are the implications of winding down the LPIF?

Some cable and satellite companies have passed the costs of the LPIF on to their customers. As LPIF contributions are reduced and eventually eliminated, these companies’ customers can expect a corresponding reduction in their cable or satellite bills.

Cable and satellite companies are required to report what measures they have taken to ensure that these reductions are reflected in the bills of affected consumers. Companies must submit these reports to the CRTC by September 17, 2012.

How will the CRTC ensure that viewers in non-metropolitan markets receive local programming?

Television stations in these markets are required to air local programming. Given that their economic situation has improved, the CRTC is confident that stations will maintain the same quality of programming.

How does the CRTC divide the Fund among broadcasters?

Since its inception, the CRTC has taken the following approach to divide the Fund among broadcasters:

Two thirds are divided so that 70% goes to English markets, and 30% to French markets.

The remaining one third of total funds are divided evenly among all eligible stations in English and French markets.

How does the CRTC determine which local television stations have access to the Fund?

Television stations operating in non-metropolitan markets have access to the Fund. However, a French-language station operating in an English metropolitan market receives the same amount of funding as those operating in francophone non-metropolitan markets. Conversely, the same is offered to English stations operating in a francophone metropolitan market.